Fernandez vs NLRC G.R. No. 105892.

January 28, 1998

FACTS:
The instant case stemmed from a consolidated complaint against private
respondents Agencia Cebuana-H. Lhuillier and/or Margueritte Lhuillier
(Lhuillier) for illegal dismissal (Rec., pp. 56-58). The Agencia Cebuana is a sole
proprietorship operated by Margueritte Lhuillier.
Petitioners demanded an increase in their wages considering the business was
booming and the employer was falsifying her taxes and informed employer that
they will join the Associated Labor Union (ALU), which made Lhuillier angry,
causing her to threaten them that should they report her to the BIR and join the
ALU something would happen to their employment. Their employer told them to
render their resignations because of some alleged anomalies by them. Private
respondent said that petitioners did not report for work and voluntarily
abandoned their work on July 19, 1990, and they were not dismissed from their
employment hence they have no cause of action against her.
Labor Arbiter favored petitioners but NLRC vacated the labor arbiters order.
MR denied. Hence, this petition.
SC ruled that the petitioners, except Lim and Canonigo,were illegally dismissed
so it had to rule now on the money claims. The labor arbiter granted varying
amounts of service incentive leave pay to the petitioners based on the length of
their tenure; i.e, the shortest was six years and the longest was thirty-three
years. While recommending that the labor arbiters decision be reinstated
substantially, the solicitor general recommended that the award of service
incentive leave be limited to three years. This is based on Article 291 of the
Labor Code which provides:
ART. 291. Money Claims. -- All money claims arising from employer-employee
relations accruing during the effectivity of this Code shall be filed within three
(3) years from the time the cause of action accrued; otherwise they shall be
forever barred
ISSUE: Whether or not the service incentive leaves may be limited to a certain
number of years.
HELD: No.
The clear policy of the Labor Code is to grant service incentive leave pay to
workers in all establishments, subject to a few exceptions. Section 2, Rule V,
Book III of the Implementing Rules and Regulations provides that [e]very
employee who has rendered at least one year of service shall be entitled to a
yearly service incentive leave of five days with pay. Service incentive leave is a
right which accrues to every employee who has served within 12 months,
whether continuous or broken reckoned from the date the employee started
working, including authorized absences and paid regular holidays unless the
working days in the establishment as a matter of practice or policy, or that
provided in the employment contracts, is less than 12 months, in which case
said period shall be considered as one year. It is also commutable to its money
equivalent if not used or exhausted at the end of the year. In other words, an
employee who has served for one year is entitled to it. He may use it as leave

days or he may collect its monetary value. To limit the award to three years, as
the solicitor general recommends, is to unduly restrict such right. The law
indeed does not prohibit its commutation.

ALU-TUCP vs NLRC G.R. No. 109902 August 2, 1994

FACTS:
On 5 July 1990, petitioners filed separate complaints for unfair labor practice,
regularization and monetary benefits with the NLRC, Sub-Regional Arbitration
Branch XII, Iligan City. The Labor Arbiter decided that they were regular
project employees who shall continue their employment as such for as long as
such [project] activity exists but entitled to the salary of a regular employee.
Both parties appealed to the NLRC. The NLRC gave its resolution which
declared petitioners to be project employees of private respondent National
Steel Corporation ("NSC"). NLRC also denied petitioners' motion for
reconsideration.
The law on the matter is Article 280 of the Labor Code, where the petitioners
argue that they are regular employees of NSC because: (i) their jobs are
necessary, desirable and work-related to private respondents main business,
steel-making; and (ii) they have rendered service for six (6) or more years to
private respondent NSC.
ISSUE: Whether or not petitioners are considered regular employees?
HELD: No.
Regular employees, in contract, are legally entitled to remain in the service of
their employer until that service is terminated by one or another of the
recognized modes of termination of service under the Labor Code.
It is evidently important to become clear about the meaning and scope of the
term "project" in the present context. The "project" for the carrying out of which
"project employees" are hired would ordinarily have some relationship to the
usual business of the employer. Exceptionally, the "project" undertaking might
not have an ordinary or normal relationship to the usual business of the
employer. In this latter case, the determination of the scope and parameeters of
the "project" becomes fairly easy. It is unusual (but still conceivable) for a
company to undertake a project which has absolutely no relationship to the
usual business of the company; thus, for instance, it would be an unusual steelmaking company which would undertake the breeding and production of fish or
the cultivation of vegetables. From the viewpoint, however, of the legal
characterization problem here presented to the Court, there should be no
difficulty in designating the employees who are retained or hired for the
purpose of undertaking fish culture or the production of vegetables as "project
employees," as distinguished from ordinary or "regular employees," so long as
the duration and scope of the project were determined or specified at the time
of engagement of the "project employees." For, as is evident from the provisions
of Article 280 of the Labor Code, quoted earlier, the principal test for
determining whether particular employees are properly characterized as
"project employees" as distinguished from "regular employees," is whether or
not the "project employees" were assigned to carry out a "specific project or
undertaking," the duration (and scope) of which were specified at the time the
employees were engaged for that project.

In the realm of business and industry, we note that "project" could refer to one
or the other of at least two (2) distinguishable types of activities. Firstly, a
project could refer to a particular job or undertaking that is within the regular
or usual business of the employer company, but which is distinct and separate,
and identifiable as such, from the other undertakings of the company. The term
"project" could also refer to, secondly, a particular job or undertaking that
is not within the regular business of the corporation. Such a job or undertaking
must also be identifiably separate and distinct from the ordinary or regular
business operations of the employer. The job or undertaking also begins and
ends at determined or determinable times. The case at bar presents what
appears to our mind as a typical example of this kind of "project."
The simple fact that the employment of petitioners as project employees had
gone beyond one (1) year, does not detract from, or legally dissolve, their status
as project employees. The second paragraph of Article 280 of the Labor Code,
quoted above, providing that an employee who has served for at least one (1)
year, shall be considered a regular employee, relates to casual employees, not
to project employees.